Singapore has earned a reputation as one of the best places in the world for starting and growing a business. In addition to its strategic location and low tax rates, the rule of law has also played a major role in its continual success in attracting investors to register company in Singapore, as transparency and certainty in the law gives foreign investors much confidence.
Once you have successfully complete the steps to register company in Singapore for foreigner, as a business operator, you are expected to uphold Singapore’s conducive investment climate by staying in compliance with all of its legal and tax requirements. As an employer, understanding Singapore’s Employment Act and the various employment laws it governs is a precursory step in successfully managing your business operation after your Singapore company setup. After all, Singapore is considered to have one of the best labour-employer relations, with its labour laws known for fairness and business-friendliness, and more importantly, their efficiency in maintaining employment standards and safeguarding working conditions for the employed.
Register Company in Singapore for Foreigner
From hiring to managing to terminating, the Employment Act stipulates the rights and duties of both employers and employees, so as to ensure that employers do not exploit their employees and that they are properly compensated for their work. If any such rights under the Employment Act are violated, the act will be enforced and legal action taken. The Act covers all individuals, both local and foreign, working under a contract of service with any company. Both parties are also free, even encouraged, to set up other necessary terms of employment between themselves, as long as they comply with the basic regulations.
From 1 April 2019, all employees in Singapore, with the exception of seafarers, domestic workers and public officers (who are covered by other regulations), are covered for core provisions such as:
Hours of Work & Overtime
Employees are entitled to work NO MORE THAN
- 8 hours daily
- 44 hours weekly
- 6 hours without a break
- 12 hours a day (overtime included, except under certain circumstances)
Employees are also entitled to 1 rest day per week, and the longest possible interval between 2 rest days is 12 days.
Gazetted public holidays in Singapore are: New Year’s Day, Chinese New Year, Good Friday, Labour Day, Vesak Day, National Day, Hari Raya Puasa, Deepavali, Hari Raya Haji and Christmas Day. Employees are entitled to paid holiday on these public holidays. In the event that a public holiday falls on a Sunday, the following Monday shall be considered the paid holiday. If the public holiday falls on a day when the employee is not contractually required to work (Saturday, for example, for someone who works a 5-day week) he or she shall be compensated, either with an extra day’s pay or an extra day off.
Employees having served at least 3 months with an employer are entitled to annual leave. The number of days is dependent on the contractual agreement, but subject to a minimum of 7 days during the first year and 1 extra day for each additional year of service.
Upon production of a medical certificate from the company doctor or government doctor or doctor from an approved establishment,
- Employees having served at least 6 months with an employer are entitled to 14 days of sick leave per year, and 60 days of hospitalisation leave (inclusive of the 14 days)
- Employees having served at least 5 months but less than 6 months with an employer are entitled to 11 days of sick leave per year, and 45 days of hospitalization leave (inclusive of the 11 days)
- Employees having served at least 4 months but less than 5 months with an employer are entitled to 8 days of sick leave per year, and 30 days of hospitalization leave (inclusive of the 8 days)
- Employees having served at least 3 months but less than 4 months with an employer are entitled to 5 days of sick leave per year, and 15 days of hospitalization leave (inclusive of the 5 days)
There is no statutory requirement to provide private health insurance to employees in Singapore. However, many employers have choosen to provide health insurance as part of their employment contract. Singapore Citizens or Permanent Residents have Medishield, a basic-tier insurance protection, as well as their Medisave account to turn to, to meet the cost of medical care in Singapore.
Maternity and Childcare Leave
Female employees having served at least 3 months with an employer are entitled to a total of 16 weeks of fully-paid maternity leave. Employers are prohibited from dismissing any employees on maternity leave. Eligible female employees are also entitled to 6 days childcare leave per year, if their child is below 7 years of age.
Salary & Bonus
The Employment Act does not make provision for a minimum salary (except for cleaners and security officers) or annual bonus. Monthly salary and other monetary incentives remain largely a negotiation between employer and employee. That said, the salary must be paid at least once a month within 7 days after the end of the salary period, and overtime pay must be paid within 14 days of the stipulated salary period.
Central Provident Fund (CPF) Contributions
CPF is a mandatory retirement savings scheme for all Singapore Citizens and Permanent Residents, and employers are required to make monthly contributions to their employees’ CPF fund by the 14th of the following month, deducting the employees’ portion from the salary. The maximum CPF contribution rate for employer and employee is 16% and 20% respectively and can be lower depending on certain factors such as employee age, permanent resident status. Foreign employees holding an Employment Pass or Work Permit do not need to contribute CPF.
An Employment Contract between employer and employee can be terminated with a written notice or by paying salary in lieu of notice to the other party. The notice period is determined by the employment contract, as there is no statutory requirement on the number of days. Employees are allowed to use any accrued annual leave to offset the notice period.